SunPass contractor had troubled history before it came to Florida

Posted July 15, 2018 6:08 p.m. EDT

By Hannah Denham, Tampa Bay Times Staff Writer, Tampa Bay Times

Florida's SunPass electronic tolling system is a mess. The vendor who runs the system has a backlog of unprocessed charges now running into the millions, a total accumulated since it stopped processing tolls on June 1.

Last week, after it began posting older charges for customers, the vendor promised the state a permanent fix.

But based on court documents and news accounts across the country, this could just be the start of a long nightmare for Florida drivers.

And the state Department of Transportation could have seen it coming.

The contractor the state picked in 2015 to operate SunPass, a subsidiary of a Xerox spin-off called Conduent State & Local Solutions, has a track record of mishandling customer service while updating tolling systems in at least seven other states.

Conduent took an average of two years to sort through unprocessed charges and get online tolling working again in other states. That's two years of unprocessed charges, lawsuits, audits, ethics investigations, legislative amnesty programs, fines and suspended contracts.

In a June 21 press release, FDOT said it would waive all late fees and penalties during system updates. But some SunPass users like Philip Belcastro of St. Petersburg are still worried about receiving a large bill down the road loaded with late fees.

"I don't know how that affects me actually going through tolls," Belcastro said, who doesn't have auto-pay set up and usually manually adds money to his SunPass account. "I don't know where that money is coming from."

After electronic tolling outages in other states, some customers who did not receive an initial bill were hit months later with tens of thousands of dollars in charges and late fees. They were often invoiced for the wrong charges. Bank accounts and car payments for some customers were suspended because of the pending debt.

Some of the most egregious cases happened in Texas. Vanessa Zabala of Hutto, Tex., found nearly $41,000 in charges when she logged in to her TxTag account, a scenario that was not that unusual reported NBC affiliate KXAN in Austin. After a year of tolling system failure, Texas fined Xerox close to $200,000 and launched an ethics investigation in April 2015.

In a 2017 investigation, KXAN quoted an anonymous Xerox whistleblower who questioned her former employer's accountability.

"Their hiring practices, their billing practices, everything, it's just -- there is something wrong with that company," said the former customer service employee. "And there's nobody watching them. Who is watching them? Isn't there a government agency that's supposed to be overlooking this kind of stuff?"

Conduent's track record

Based in New Jersey, the customer service technology arm of Xerox Corp. became Conduent Inc. in January 2017 and has about $1.4 billion in annual revenue, according to the company's latest financial report. It has a long history of mergers, but retains ties to Xerox. It's headed by David Amoriell, a Xerox Corp. executive.

The Florida Department of Transportation signed its $287 million deal with Xerox in November 2015 to run the customer service technology for Florida's Turnpike Enterprise (FTE), Tampa Hillsborough Expressway Authority, Miami-Dade Expressway Authority and the now Central Florida Expressway Authority, according to the original contract. An arm of FDOT, FTE is in charge of overseeing the SunPass system operations.

When the contract was signed, Florida transportation leaders already knew about Xerox's problems in Texas, according to a final review by Florida's division of administrative hearings. But contract negotiators blamed the problem on a vendor that preceded Xerox.

"Following its review, the Negotiation Team was satisfied with Xerox's approach to data migration for the FTE and was not concerned that Xerox's issues with the Texas Department of Transportation would impact Xerox's management and operation of the Customer Service System contract," the report read.

Three years later, however, Texas is still wrangling with Xerox, which it fined almost $200,000. The Texas Legislature passed a measure in January to cap toll fees that still haven't been processed.

Other states that contracted with Xerox also started seeing red flags long before Florida picked the company as its vendor.

For California, toll problems arose for drivers using the Golden Gate Bridge in 2013 and Los Angeles expressways in 2014, when customers complained of receiving thousands of dollars in fines without ever receiving an initial toll bill, the San Francisco Chronicle and the Los Angeles Times reported.

Michigan delayed its contract payments to Xerox after technical glitches with the state's tolling system and credit card processing that flared up in June 2015 took two years to fix, MLive Media Group reported.

That same year, E-ZPass users in Maryland, Rhode Island and New Hampshire also experienced problems with the Xerox-run customer service system and the three states didn't renew their contracts with Xerox.

When New Hampshire replaced Xerox in October 2015 with competitor Cubic Transportation Systems, Inc., Xerox filed a lawsuit. Bill Boynton, a spokesman for New Hampshire's transportation department, declined to comment on Xerox's history with the state's tolling because he said the litigation is still ongoing.

However, he was aware of Florida's woes.

"I've seen that there's been publicity coming out of Florida," Boynton told the Times last week, "to put it mildly."

That New Hampshire suit was filed the same month that the Florida DOT awarded Xerox the contract over Cubic and Accenture to provide its centralized customer service system (CCSS) for the state's electronic tolling for the Tampa Hillsborough Expressway Authority, the Central Florida Expressway and the Miami–Dade Expressway Authority. Both Cubic and Accenture petitioned the vendor ranking process, which an FDOT administrative law judge dismissed at the end of 2014 and again in mid-2015. Soon after, the FDOT paid Cubic a $3.6 million settlement, according to documents.

A year after Xerox came to Florida, residents in New York started reporting now-familiar woes with the Xerox-run cashless tolling system, USA Today-affiliate Lohud reported. The New York Thruway Authority implemented almost two months of amnesty and extended discount programs at the beginning of 2018 to make up for the system failure.

A slow fix for Florida

Today, more than a month after Conduent's tolling shutdown in Florida, many SunPass users are wondering when they'll receive their bills.

As of July 11, more than 28 million charges have been posted to SunPass accounts starting with the earliest missed charges on June 1, according to the state turnpike agency. But SunPass user Marjorie Hickernell of Windermere, Fla. said her account doesn't look that way -- it has gaps in charges posted between June 2 and June 29, and June 29 and July 7.

"It's been very frustrating," she said. "You want to have your bills paid."

Amoriell, the Conduent executive, sent a letter to FDOT secretary Mike Dew on Tuesday, promising to bill all SunPass customers directly and to catch up on the backlog of unprocessed charges. But he gave no timeline.

Two weeks ago, Conduent started chipping away at the backlog of at least 100 million charges. State officials said the contractor had processed more than 30 million of the pending charges as of Thursday and will continue to process at least 8 million charges each day.

Poulton, a spokeswoman for the Florida Turnpike agency, said in an email last week that FDOT will hold Conduent "fully accountable for the delays that it has caused and will be enforcing all penalty clauses of the contract to the maximum extent possible."

SunPass contractor Conduent State & Local Solutions, Inc. has had problems with its customer services operations for electronic tolling systems in at least seven other states: Texas, California, Michigan, Maryland, Rhode Island, New Hampshire and New York.